Out of state smaller properties?

Question

Hello everyone. How does one get started with out of state investing with smaller properties? Often you hear that you need 40-50 units to cover the cost of property management. What if you don't want that many units?

How does someone get started with out of state investing with a simple triplex or fourplex?

Appreciate the feedback !

How does someone get started with out of state investing with a simple triplex or fourplex?

Appreciate the feedback !

Account Closed · Answer

Hey Daniel,

You can still cash flow on small properties, even with financing. Just avoid D-class single family homes due to low property value. If you have a great property manager you could probably swing 4 units D-class and do just fine.

For a new out-of-state investor buying an SFR I think the sweet spot is $1000 rents on a 75k property in good condition and a C neighborhood.

If you want to get started with 3/4 units you can either buy one that's occupied and doesn't need a ton of work with financing, which is pretty cool. Just find a good property manager and get to it! My property manager is awesome- as a result I get to live in CA and never see my properties, buy stuff at discount prices, and I've got someone that keeps my C class properties paid on time month in and month out!

Steve Kontos · Answer

@Daniel Alva

I have been investing out of state for years now and when I started out, it was small deals with great cash flow.  It is a myth when people say you need to buy large.  Do your due diligence and have a team set up in whatever state you ultimately choose.  Investing out of state is not black and white; there are variables that you have to make sure are accounted for since you will not be nearby.

Best of luck!

Matt K. · Answer

you don't need that many... you just need to buy smart. MFH isn't always the best although it's extremely popular on here. Buy a property that makes sense... based on numbers.

Out of state smaller properties?

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